One way that I've found useful is to ask the question, "How many bits do you need to represent an integer counter from 0 to 999?" They answer, "10 bits." "How

One way that I've found useful is to ask the question, "How many bits do you need to represent an integer counter from 0 to 999?" They answer, "10 bits." "How many base 10 digits do you have in the counter?" "Three." "How many bits did you need for each digit?" Everyone gets it. Explaining arithmetic coding is then much easier.